Indian low-cost carrier, SpiceJet Limited on Tuesday reported a consolidated loss of ₹600.52 crore($80.4 million) for the June quarter, primarily due to muted travel demand caused by the COVID-19 outbreak.
The second quarter of 2020 will go down in history as the worst quarter for Indian carriers. Passenger flights were banned on March 25th and only resumed on May 25th, after two full months. With two months of passenger revenue lost, airlines saw major losses and switched to cargo flights instead.
The airline had reported a profit of ₹262.89 crore during the same period of the previous year.
Auditors of SpiceJet Limited, S.R. Batliboi and Associates Llp, have once again raised doubts about the company’s ability to continue as a going concern after the company’s June quarter results after raising similar concerns as the airline reported its highest ever quarterly loss of ₹807.07 crore during the March quarter.
The auditors said that the company would have reported a wider loss in the June quarter had it not recognized other income and foreign exchange gains. “In our view, there is no virtual certainty to recognize such income and related receivable,” the auditor said.
“Had the company not recognised such other income (including its related foreign exchange restatement), the reported loss for the quarter would have been higher by ₹141.34 crore and accumulated losses as at 30 June.”
2020 would have been higher accordingly, it added.
Two analysts polled by Bloomberg had estimated a ₹1039.2 crore loss for the airline. SpiceJet reported an operating revenue of Rs521 crore, down almost 83% year over year. Total expenses in the June quarter fell to ₹1,311.60 crore , down from ₹2,886.74 crore during the same quarter of the previous year.
India’s largest domestic airline, InterGlobe Aviation Ltd operated IndiGo reported a record consolidated net loss of ₹2,844.3 crore during the June quarter due to the impact of covid-19 pandemic on the aviation sector.
SpiceJet said it continues to incur various costs for its grounded Boeing 737Max planes. However, the airline hopes for the planes to be inducted back to its fleet by the March quarter of the current fiscal. The airline has 13 Boeing 737Max aircraft in its fleet, currently all of which are grounded.